Is UV Island Overlap OK?
There's nothing wrong with UV maps overlapping. While it is difficult to say so for certain with all game engines, all of the game engines I have used have always been comfortable with overlapping UV maps.

Depending on what you're looking to unwrap, you may wish to use Cube Projection, Sphere Projection or Cylinder Projection instead of simply UV unwrapping by default. You can find these options below "Unwrap" in the "UV" dropdown.

You may also wish to use Smart UV Unwrap. All of these settings can be found in the "UV Editing" tab. 



Of course, overlapping UVs could potentially be messy to work with, so some people choose to simply duplicate a part of the texture for a duplicate UV island in a different location.

For adding your textures into Unreal Engine, you will need to duplicate any pipeline you have in Blender. If you have multiple nodes running into a shader (e.g. Image Texture into Base Color &amp; Noise Texture + Bump into Normal), you will need to replicate the same nodes using Unreal Engine shaders.



It is possible that you could bake the texture - however, keep in mind that you are baking the lighting as well, so this would likely only be useful for static objects with similar lighting to your UE4 project.